On December 29, 2022, the Consolidated Appropriations Act of 2023 (CAA 2023) became law. Of its many changes to employee benefit plans, an especially welcomed one is the extension of the Health Savings Account (HSA) safe harbor that allows high deductible health plans (HDHPs) to continue to waive the deductible for telehealth services without causing members to lose HSA eligibility. The waiver is now available for HDHP plan years beginning before January 1, 2025. For calendar year plans, this means the waiver is available until December 31, 2024.
The HDHP deductible waiver and corresponding HSA safe harbor originated as part of a broad range of measures enacted in the Coronavirus Aid, Relief and Economic Security (CARES) Act of 2020 to provide relief during the COVID-19 emergency. The waiver was further extended in subsequent legislation but was set to expire on December 31, 2022. Without the CAA 2023 extension, on January 1, 2023, HDHPs that provided this waiver would have had to start charging members for telehealth services until their deductible was met. Unless another HSA exception is applied, meeting the deductible would be
required for HDHP members to remain eligible to make HSA contributions or to receive their employers’ HSA contributions.
Recommended Actions for Employers Offering HDHPs
Plan sponsors that provided the deductible waiver for telehealth coverage under their HDHPs through the end of 2022 need to decide whether they will apply the waiver during this new extended period.
If they do so, plan sponsors will want to contact their health insurance carrier or third-party administrator to ensure the deductible waiver is being properly administered now and will continue to be so through December 31, 2024 (for calendar year plans).
Employers who do not currently provide the deductible waiver for their telehealth coverage under their plan may want to consider amending their HDHP plan to provide this benefit to their employees in light of the two-year extension.
Finally, plan sponsors will need to communicate with plan participants the plan design post-2022 so that participants know and understand whether the HDHP will provide first-dollar coverage for telehealth services.
Employers will also want to keep watch for future guidance extending or making these rules permanent. Many commentators and industry stakeholders have speculated the passage of the CAA 2023 extension means that Congress is open to making the HDHP deductible waiver permanent before this current extension expires.
If you have any questions about the extension of the deductible waiver for telehealth services provided under an HDHP, would like to amend your group health plan to include it, or would like Calfee to review your group health plan or other welfare plan documents with respect to compliance, design or administration, please contact any member of our Employee Benefits and Executive Compensation practice group.
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